QUICK REVISION NOTES-TYBBA-V (MARKETING SPEC.

)
 To Help Middlemen
ADVERTISING & 

To Increase Sales
Increase in Production

BRAND To Win the Confidence of
Public
 Production of New Goods

MANAGEMENT  Creation of Goodwill

2. Secondary Functions
 Helpful in Distribution
 Information Regarding Price
 Less Risk
CH:1 INTRODUCTION  Helpful in Competition
 To Remind
TO ADVERTISING CLASSIFICATION OF ADVERTISING:
WHAT IS ADVERTISING? 1. Product advertising
Advertising is a paid form of mass communication that 2. Institutional advertising
consists of the special message sent by the specific 3. Selective or competitive advertising
person. It includes oral, written, or audiovisual message 4. Comparative advertising
addressed to the people for the purpose of informing 5. Co-operative advertising
and influencing them to buy the products or to act 6. Commercial advertising
favourably toward idea or institution. 7. Non-commercial advertising
8. Direct action advertising
Characteristics Of Advertising:
 Paid Form TYPES OF ADVERTISING:
 Tool for Promotion  Online Advertising
 Personal or Non-Personal  Television Ads
ADVERTISING OBJECTIVES:  Ads in Theatres
 To Inform Buyers  Product Placement
 To Persuade or Convince Buyers  Radio
 To Remind Buyers  Print
 To Face Competition  Outdoor
 To Achieve Sales Targets  Global
 To Build and Improve Brand Image  Outdoor Blank Space Advertising
 To Help or Educate People  Online E-mailers
 To Build Company Image and Reputation  Endorsements
 To Assist Sales Force and Middlemen THE ROLE OF ADVERTISING IN MARKETING?
 Other Objectives  Awareness
 To promote new products.  Information
 To build long-term relations.  Persuasion
 To remove misunderstanding.  Attitudes
 To expand of market.  Reminder
 To gain confidence of buyers.  Brand Loyalty
 To request customers to compromise with  Brand
unavoidable circumstances.  Image
 To seek apology of the buyers
 Counter Competitors’ Claims
FUNCTIONS OF ADVERTISING:
 Expansion of Markets
 Promotion of Sales
 Educating the Customers
 Introduction of New Products
 Support to Production System ROLE OF ADVERTISING AGENCIES:
 Increasing Standard of Living  Conducting A Thorough Research
 Public Image  Developing Advertisements
 Support to Media  Media Planning And Buying
The functions of advertising are based on the marketing  Account Management
objectives.  Budgeting
These are divided into two parts:  Sales Promotion
1. Primary Functions  Public Relations
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 Developing Marketing Strategies ELABORATION LIKELIHOOD
 Personalizing Marketing Communication MODEL (ELM)
The Elaboration Likelihood
Model (ELM) of persuasion is a
CH:2 UNDERSTANDING dual process theory that
describes the change of attitudes
COMMUNICATION and behavior. The theory explains
how attitudes are formed and reinforced by persuasive
PROCESS arguments. The idea is that when a person is presented
with information, this person will process this
information on a certain level of elaboration.
UNDERSTANDING SOURCE:
Routes to Persuasion:
The source is the party that wants to communicate
 Central Route Processing
an idea. They have to encode this idea in the form
 Peripheral Route Processing
of a message.
 Central Route Processing
SOURCE FACTORS:  Peripheral Route Processing
1. Source Credibility Factors Route Determination:
2. Source Attractiveness  Motivation
 Ability
UNDERSTANDING MESSAGE
 Opportunity
The message contains the information to be transmitted.
MESSAGE FACTORS:
1. Order of presentation
2. Conclusion Drawing
CH:3 PLANNING FOR
3. Message sidedness

UNDERSTANDING CHANNEL:
MARKETING
The channel is the means used to send the message. COMMUNICATION
CHANNELS FACTORS
1. Personal vs Non-Personal Channels TOOLS OF INTEGRATED MARKETING
2. Effects of alternative mass media COMMUNICATIONS:
3. Effects of context and environment
 Advertising
AIDA MODEL:  Public Relations
The Attention, Interest, Desire, and Action model in  Personal selling
advertising  Direct Marketing
 Sales Promotion
The AIDA Model, which stands for Attention, Interest,
 Social Media Marketing
Desire, and Action model, is an advertising effect model
 Sponsorships
that identifies the stages that an individual goes through
 Mobile Marketing
during the process of purchasing a product or service.
The AIDA model is commonly used in digital marketing, 6 Steps in the IMC Planning Process:
sales strategies, and public relations campaigns Step1: Know your target audience
The AIDA Model Hierarchy: Step2: Develop a situation analysis
 Attention Step3: Determining marketing communication objectives
 Interest Step4: Determining your budget
 Desire Step5: Strategies and tactics
Step6: Evaluation and measurement
 Action

HIERARCHY OF EFFECTS MODEL: (STEPS) DAGMAR APPROACH FOR SETTING

 Awareness ADVERTISEMENT OBJECTIVES
 Knowledge DAGMAR is a marketing expression that stands for
 Liking “Defining Advertising Goals for Measured Advertising
 Preference Results”. It is a marketing tool to compute the results of
an advertising campaign. DAGMAR attempts to guide
 Conviction
customers through ACCA model. According to this
 Purchase
approach, every purchase encounters four steps;
Awareness, Comprehension, Conviction, and Action.

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DAGMAR method is an established technique of
creating effective advertising. DAGMAR is an advertising CH:4 BRAND &
model proposed by Russell Colley in 1961.

The DAGMAR Model;

BRAND


Awareness
Comprehension
MANAGEMENT
 Conviction
WHAT IS A BRAND?
 Action
Brand is a “name, term, sign, symbol, or design, or a
ADVANTAGES OF DAGMAR MODEL: combination of them, intended to identify the goods and
 Target Audience services of one seller or group of sellers and to
 Concrete And Measurable differentiate them from those of competition.”
 Specified Timeframe & Benchmarks Technically speaking, then, whenever a marketer creates
 Written Goal a new name, logo, or symbol for a new product, he or
she has created a brand.
OBJECTIVES OF DAGMAR APPROACH:
 Persuade a prospect to visit the showroom. EXPLAIN BRAND MANAGEMENT
 Growth in market share.  The process of maintaining, improving, and
 Improve sales turnover. upholding a brand
 Perform complete selling function.  Brand management involves a number of important
 Advertise a special reason to buy. aspects such as cost, customer satisfaction
 Stimulate impulse sales.  Brand management is built on a marketing
 Remind people to buy. foundation, but focuses directly on the brand
 Create awareness about the product and brand  Proper brand management can result in higher sales
existence. of not only one product, but on other products
 Create favourable emotional disposition towards the  Brand management is nothing but an art of creating
product.  Branding makes customers committed
 Impart information regarding benefits and distinctive  Gives a quality image
features of the product.  Brand management includes managing the tangible
 Combat and offset competitive claims. and intangible characteristics of brand.
 The intangibles include emotional connections with
APPEALS AND EXECUTION STYLES the product / service
The advertising appeal refers to the approach used to  Capturing the niche market
attract the attention of consumers and/or influence their  Aim of branding is to convey brand message vividly,
feelings toward the product, service, or cause. An create customer loyalty,
advertising appeal can also be viewed as "something  Customer perceptions
that moves people, speaks to their wants or needs, and
 Raise customer expectations
excites their interest."
 Create differentiation
Variety of advertising appeals:  Reduce customers’ perceived monetary, social and
A. Advertising Appeals safety risks in buying goods/services
B. Emotional appeals  Good support
C. Sex appeal  Management helps in building a corporate image
D. Music appeal  Manager has to oversee overall brand performance
E. Scarcity appeal
F. Brand appeal IMPORTANCE OF BRANDING
G. Adventure appeal  Memorability
H. Endorsement appeal  Loyalty
I. Romance appeal  Familiarity
Additional Types of Appeals:  Premium image, premium price: excellent service,
 Reminder advertising product
 Teaser Advertising  Extensions
 User Generated content advertising  Lower marketing expenses
 Makes Purchasing Easier
 Create a place in market
 Setting an image

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DIFFERENT KIND OF PERSPECTIVES: 1. Identifying and Establishing
A. Consumer’s perspectives Brand Positioning.
 Consumers 2. Planning and Implementing
Brand Marketing Programs.
 Manufacturers
3. Measuring and Interpreting
B. Firm’s perspectives
Brand Performance.
C. Retailers and Distributors perspectives
4. Growing and Sustaining Brand
SCOPE OF BRANDING: Equity
 Physical Goods EXPLAIN CO – BRANDING:
 Services Co-branding is a marketing partnership between at least
 Retailers And Distributors two different brands which are independent providers of
 Online Products And Services goods or services. This co-branding effort can result in
 People And Organizations various type of promotions such as sponsorships or
 Sports, Arts, And Entertainment advertisements. The association will benefit both the
 Ideas And Causes brands more when they come together, rather than when
they are promoted individually.
BRAND RELATED WORDS:
Various forms of co-branding:
 Brand Name
A. Same company co-branding
 Brand Attributes
B. Joint venture co-branding
 Brand Positioning C. Multiple co-branding
 Brand Identity D. Retail co-branding
 Brand Image
 Brand Personality DEFINE BRAND NAME:
 Brand Awareness Word(s) that identify not only a product but also its
 Brand Loyalty manufacturer or producer, such as Apple, Coca Cola,
 Brand Association IBM.
 Brand Equity LIST DOWN PUNCH LINE OF FOUR FAMOUS BRANDS
 Brand Extension: 1. Amul: The taste of India
 Co-Branding 2. Pepsi : Yehihain right choice baby
3. Thums Up : Taste The Thunder
BRANDING CHALLENGES: 4. Surf : DaagAcchehain
 Savvy Customers 5. Tata Safari : Reclaim Your Life
 Media Fragmentation 6. Asian Paints : HarKharKuchchKahtahein
 Increased Competition 7. Air Deccan : Simplifly
 Increased Cost 8. Rasna : I love you Rasna
 Most Complex Brand Family And Portfolio 9. Frooti : Fresh N Juicy
10. Coca Cola : ThandaMatlab Coca Cola
 Difficult To Differentiate
11. Raymond’s : The Complete Man
 Decreasing Brand Loyalty
12. Bajaj: Hamara Bajaj
 Emerging New Communication Option
13. Dairy Milk : SwadZindagiKa
 Increasing Promotional Expense
14. Bingo : No Confusion, Great Combination
 Increasing In Cost Of Production
15. Boost : Boost is the secret of our energy
 Short Term Performance Orientation 16. Polo : The mint with a hole
 Increasing Job Turnover
 Decreasing Advertisement Expense
 Increasing Trade Power
CH:5 CUSTOMER BASED
EXPLAIN STRATEGIC BRAND MANAGEMENT
PROCESS: BRAND EQUITY
Strategic brand management involves the design and
implementation of marketing programs and activities to GIVE DEFINITION OF BRAND EQUITY:
build measure and manage brand equity. A brand’s power derived from the goodwill and name
recognition that it has earned over time, which
BRAND MANAGEMENT PROCESS HAS HAVING FOUR
translates into higher sales volume and higher profit
STEPS:
margins against competing brands is known as Brand
Equity.

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SOURCES OF BRAND EQUITY
DEFINE BRAND IMAGE
a. Brand Awareness
DEFINE BRAND IMAGE:
b. Brand Image
The impression in the consumers'
c. Brand Associations
mind of a brand's total personality
STRONG BRAND BUILDING (real and imaginary qualities and
STEPS TO BECOME SUCCESSFUL BRAND: shortcomings). Brand image is
STEP 1: BRAND IDENTITY – WHO ARE YOU? developed over time through advertising
STEP 2: BRAND MEANING – WHAT ARE YOU? campaigns with a consistent theme, and is authenticated
STEP 3: BRAND RESPONSE – WHAT DO I THINK, OR through the consumers' direct experience
FEEL, ABOUT YOU? FEATURES OF GOOD BRAND NAME:
STEP 4: BRAND RESONANCE – HOW MUCH OF A
 Simple and easy to pronounce
CONNECTION WOULD I LIKE TO HAVE WITH YOU?
 Short
HARLEY-DAVIDSON OWNERS GROUP:  Easy to recognize and remember
APPLICATION OF CBBE MODEL  New and attractive
Step 1: Brand Identity  Should reflect the nature of product
Step 2: Brand Meaning  Legally safe
Step 3: Brand Response  Suggestive
Step 4: Brand Resonance  Should not be obscene

Based Brand Equity (CBBE) Pyramid (Kit-Kat ) EXPLAIN BRAND POSITINING:

 Brand Salience Brand positioning refers to “target consumer’s” reason
to buy your brand in preference to others. It is ensures
 Brand Performance
that all brand activity has a common aim; is guided,
 Brand Imagery
directed and delivered by the brand’s benefits/reasons
 Brand Judgement
to buy; and it focuses at all points of contact with the
 Brand Feelings
consumer.
 Brand Perception
DEFINE BRAND LOYALTY:
CRITERIA FOR CHOOSING BRAND Brand loyalty is when customers continue to purchase
ELEMENTS: from the same brand over and over again, despite
 Memorability competitors offering similar products or services. Not
 Meaningfulness only do customers continue engaging and purchasing
 Likability from the same brand, but they also associate positive
 Transferability feelings toward that brand
 Adaptability
A consumer will consistently purchase the same
 Protectability product because she perceives it as being the superior
OPTIONS AND TACTICS FOR BRAND product among the choices available

ELEMENTS Brand loyalty is important for several reasons:

 Brand Names  First, it reduces the cost of production
 Brand Name Pronounce  Second, companies with brand-loyal customers don't
 Brand Name associations have to spend as much money on marketing the
 Naming Procedures product
o Define objectives  Finally, loyal customers tend to recommend products
o Generate names  Businesses have to exert significant effort to
o Screen initial candidates facilitate brand loyalty
o Study candidate names  Businesses also will attempt to leverage brand
o Research the final candidates loyalty
o Select the, final names.  Hope is to create brand loyalty
 URLs
 Logos and Symbols
 Slogans
 Packaging

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SOME OTHER WAYS
CH:6 MANAGING BRAND THROUGH WHICH BRAND
OVER TIME REVITALIZATION CAN BE
DONE:
DEFINE BRAND REINFORCEMENT  Expanding Brand Awareness
Brand reinforcement refers to an activity associated with  Improving Brand Image
getting those consumers who have tried a particular  Entering New Markets
brand to become repeat purchasers along with attracting
BRAND REVITALIZATION PROCESS IN
new users. It is a key objective of the growth stage of the
product's life cycle. DETAIL:
 Know Your Brand Inside and Out
DEFINE REINFORCEMENT  Understand Your Consumers
The Brand Reinforcement majorly focuses on  Match Your Strengths with Their Weaknesses
maintaining the Brand Equity by keeping the brand alive  Look the Part
among both the existing and new customers. This can  Back It Up with Valuable Content
be done through consistently conveying the meaning of
brand in terms of: Brand reinforcement includes regular WHAT IS BRAND PORTFOLIO?
monitoring of a product at all the levels of product life The Brand Portfolio refers to an umbrella under which all
cycle (viz. Introduction Stage, Growth Stage, Maturity the brands or brand lines of a particular firm functions to
Stage and Decline Stage) to keep a check on the serve the needs of different market segments. In simple
changes in the tastes and preferences of customers words, brand portfolio encompasses all the brands
 Maintaining brand consistency offered by a single firm for sale to cater the needs of
 Protecting sources of brand equity different groups of people. Brand portfolio is generally
 Fortifying versus leveraging created because each brand has certain boundary
 Fine-tuning the supporting marketing program beyond which it cannot fulfil all the needs of different
market segments.
DEFINE BRAND REVITALIZATION:
The Brand Revitalization is the marketing strategy DIFFERENT ROLES OF BRAND PORTFOLIO:
adopted when the product reaches the maturity stage of  Flanker Brand
product life cycle, and profits have fallen drastically. It is  Cash Cow Brand
an attempt to bring the product back in the market and  Low-End Entry Level Brand
secure the sources of equity i.e. customers Despite a  High-End Prestige Brand
good reinforcement strategy, a product has to be
revitalized because of some uncontrollable factors such ADJUSTMENTS TO THE BRAND PORTFOLIO
as competition, the invention of new technology, change  Migration Strategies
in tastes and preferences of customers, legal  Acquiring New Customers
requirements, etc  Multiple Marketing Communication Program
 Brand Extensions and Sub-Brands
DEFINE REVITALIZING BRANDS  New Distribution Outlets
The Brand Revitalization is the marketing strategy  Retiring Brands
adopted when the product reaches the maturity stage of
product life cycle, and profits have fallen drastically. It is WHAT IS ORPHAN BRAND?
an attempt to bring the product back in the market and In the retail industry, there’s something called an
secure the sources of equity i.e. customers. Branding "orphan brand." These brands are items owned by a big
describes how Royal Enfield has revitalized its images company that don’t really fit in with everything else they
and maintained its relevance with the target audience produce. They're lonely outsiders. For example, look at
through an evolving product portfolio strategy. Pringles, a very popular snack food, but it was owned by
Procter & Gamble, which is best known for household
BRAND HAS TO BE REVITALIZED BECAUSE items like Gillette razors.
OF THE FOLLOWING REASONS:
 BRAND RELEVANCE GIVE EXAMPLE OF FOUR BRANDS THAT
 COMPETITION HAVE ADOPTED BRAND REVITALIZATION
 LEGAL ISSUES STRATEGY TO MANAGE THEIR BRAND OVER
 TECHNOLOGY OF TIME.
 GLOBALIZATION  Harley-Davidson Motor Company, USA
 MERGERS & ACQUISITIONS  Delta Airlines
 Technology company IBM

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 Lees of Scotland

GIVE EXAMPLE OF FOUR BRANDS THAT INTERNATIONAL

HAVE ADOPTED BRAND REINFORCEMENT
STRATEGY TO MANAGE THEIR BRAND OVER MARKETING
OF TIME.


Dabur
British rock band Coldplay
MANAGEMENT
 Delta Faucet
 Michelob beer CHAPTER:1
INTERNATIONAL
MARKETING
MEANING INTERNATIONAL MARKETING
International marketing is the application of marketing
principles by industries in one or more than one
country. With the increasing change in customers’
demands, choices, preferences and tastes, the
economies are expanding and giving way to more
competitive marketing. Thus, organizations need to
respond rapidly to the demands of the customers with
well-defined marketing strategies.

NATURE OF INTERNATIONAL MARKETING

 Large Scale Operations
 Broader Market
 Intense Competition
 Higher Risk and Challenges
 International Restrictions
 Controlling Nature
 Subject to Diplomatic Relations

IMPORTANCE OF INTERNATIONAL
MARKETING:
 Survival
 Growth of International Market
 Sales and Profits
 Benefit from Diversification
 Inflation and Price Modernization
 International Marketing and Standard of Living

INTERNATIONAL MARKETING MANAGEMENT

PROCESS:
A. Deciding to Internationalize.
B. Market Selection
Important criteria in market selection:
 Geographical proximity
 Market potential of the country
 Market Access
 Market characteristics
C. Product Selection
Important criteria in market selection:
 Elasticity of supply
 Demand of the Products
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D. Selection of Entry Mode Some positioning possibilities
Various entry modes in the foreign markets: from which a company can
 Exporting choose any one, to position
 Licensing itself in the international
 Franchising market:
 Contract Manufacturing A. Attribute positioning
 Joint Venture B. Benefit positioning
 Strategic Alliance C. Used or application-based positioning
 Assembly D. Competitor’s positioning
 Mergers and Acquisitions E. Product category positioning
-
F. Quality and price position
E. Selection of Marketing Strategy or Marketing Mix
Decision INTERNATIONAL BUSINESS APPROACHES
Elements of the marketing mix: Different Approaches are:
 Product strategy 1. Ethnocentric Approach
 Pricing strategy 2. Polycentric Approach
 Distribution strategy 3. Regiocentric Approach
 Promotion strategy 4. Geocentric Approach
F. International Organization Decision
WHAT IS INTERNATIONAL MARKETING
WHAT IS INTERNATIONAL MARKET ENVIRONMENT?
SEGMENTATION? Marketing environment refers to all internal (firm related)
International market segmentation refers to the process and external (market related) forces which are relevant
of dividing its total international market into one or more to marketing strategy formulation.
parts (segments or sub-markets) each of which tends to
Business Environment Are of Two Types:
be homogeneous in all significant aspects
A. INTERNATIONAL ENVIRONMENT
Objectives of Marketing Segmentation B. EXTERNAL ENVIRONMENT
 Determine differences among buyers
THE ENVIRONMENT OF GLOBAL
 To spot and to compare market opportunities
 To use his knowledge of the marketing response
MARKETING:
differences of various customers  Internal environment
 To make suitable adjustments  Domestic environment
 Foreign environment
Importance of Market Segmentation:  Global environment
 Minimizes aggregation of risk
 Helps know company strengths and opportunities
TYPES OF ENVIRONEMENT:
 Provides opportunities to expand market  Economic environment
 Creates innovations  Social environment
 Creates gains to consumer  Demographic environment
 Political and government envirnment
WHAT IS INTERNATIONAL MARKET  Technological environment
POSITIONING?
FACTORS AFFECTING MARKET SELECTION:
International positioning is positioning a product or
 Objectives
brand for the international market. In either case, you
need to find a common platform to position the product  Growth
or brand that makes sense across all cultural norms. For  Business strategy
example, tea tastes like tea in any place you drink it, but  International orientation
how it is prepared may differ between China, India,  Resources
England, the USA and Australia.  The dynamism and philosophy
Main steps that can be used to prepare an MARKET RELATED FACTORS:
international positioning strategy: There are a number of market related factors which need
Step 1. Market Segmentation to be carefully evaluated for market selection. The
Step 2. To Prepare Competitors Profile market related factors may be broadly grouped into
Step 3. To determine how Competitors are positioned general factors and special factors.
Step 4. To determine how the Decisions are made by the In Genreal Factors:
Consumers
 Economic factors
Step 5. Differentiate the Product to Maximize its Appeal
 Economic policy
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 Business regulations multinational corporations to
 Currency stability outsource components in order
 Political factors to gain economies of scale
 Ethnic factors ADVANTAGES:
 Infrastructure  International uniformity
 Bureaucracy and procedures  Standard benefits.
 Market Hub  Reinforces positive consumer
perceptions
IN SPECIFIC FACTORS:  Reputation of your product
 Trends in domestic production  Positive word-of-mouth
 Trends in imports and exports  Economies of scale
 Nature of competition  Manufacturing in bulk
 Government policy
 Including improved research and development
 Infrastructure relevant
 Marketing operational costs
 Supply conditions
 Lower costs of investment
 Trade practices  Quality is improved
 Cultural factors
DISADVANTAGES:
MARKET ENTRY STRATEGIES:  Wholly undifferentiated
 Licensing / franchising  Not unique in anyway
 Exporting  Leaves the obvious opportunity
 Contract manufacturing  Products have different uses
 Fully owned manufacturing facilities  Local markets have local needs
 Joint venturing  You could leave yourself vulnerable
 Mergers and acquisitions  Diminishes the levels of flexibility
 Strategic alliance ADAPTATION
Adaptation strategy implies changing various aspects of
products and services to a considerable extent in order
to meet the needs of consumers in international markets
CHAPTER:2 taking into account their differences. The strategy of
adaptation allows global businesses to respond to
INTERNATIONAL changes in local marketplace in rapid manner. These
changes may be political, economical, social or

MARKETING MIX technological; nevertheless, relevant business

processes may be subjected to modifications in order to
eliminate or at least to minimize negative impacts of
PRODUCT COMMUNICATION STRATEGIES these changes.
USED IN INTERNATIONAL MARKETING ADVANTAGES OF ADAPTATION:
 Standardized strategy
 Strategic Option 1: Product and Communications  Buyer behaviour differently in each market.
Extension – Dual Extension  Attributes may vary from nation to nation is
 Strategic Option 2: Product Extension necessary to adapt the strategy
Communications Adaptation  Important for costumers
 Strategic Option 3: Product Adaptation –  Actual information level
Communications Extension  Availability and usage differ in different countries
 Strategic Option 4: Product and Communications
DISADVANTAGES OF ADAPTATION:
Adaptation – Dual Adaptation
 High levels of financial expenses
 Strategic Option 5: Product Invention
 Adaptation strategy
ADVANTAGES AND DISADVANTAGES OF  costly initiative
STANDARDIZATION VS ADAPTATION.  Low speed of implementation
STANDARDIZATION: BRANDING DECISIONS IN INTERNATIONAL
Product standardization (also called globalization)
involves making one global product in the belief the
MARKETING:
same product can be sold across markets without Important branding decisions are the following
significant modification. This concept has become more  To Brand or Not to Brand:
meaningful because of the growing trend by  Manufacturer ‘s Brand or Private Brand
 Same Brands or Different Brands
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BRANDING PROBLEM IN INTERNATIONAL  Exchange rate
MARKETING:  Market characteristics
A. Difficulties for a small firm to promote  Image
B. Heavy cost of brand promotion
GOVERNMENT FACTORS:
C. Cultural and other factors make branding decision
 Regulation of Margins
complicated
 Pricing Floors and Ceiling
D. Pay a fee to the registered holders
 Tax Concessions and Exemptions
E. Problem by prefixing or suffixing
 Other Incentives
PACKAGING AND LABELLING IN  Government Competition
INTERNATIONAL MARKETING  Taxes
Terms packing and packaging are generally used in a  International Agreements
broad sense and are synonymous, they are distinct in  Subsidies
the marketing parlance. Packing (also known as
transport packing) refers to the protective covering used
WHAT IS TRANSFER PRICING?
for shipment of the goods, while packaging (also known The price charged by one member of multinational
organization to another member of the same
as product packaging or consumer packaging) refers to
organization for the provision of goods or services or
the package in which the product reaches the consumer.
the use of a property, including intangible property.
Functions Of Packaging:
Transfer pricing from a tax perspective is relevant for
- Protection the allocation of profits between the various legal
- Preservation entities and branches of multinational companies. Local
- Presentation governments have an interest to tax a ‘fair share’ of the
Importance Of Packaging: profits of multinational companies, i.e. the part of the
- Self – service profit that is realized in their jurisdiction.
- Consumer Affluence Objectives of the intercompany pricing system are
- Integrated Marketing Concept i.To maximize the total profits of the company;
ii.To facilitate parent-company control; and
FACTORS IN INFLUENCING PACKAGING
iii.To offer management at all levels, both in the product
DECISION: divisions and in the international divisions, and
 Physical characteristics adequate basis for maintaining, developing, and
 Physical characteristics receiving credit for their own probability.
 Economy
 Convenience STRATEGIES OF TRANSFER PRICING:
 Miscellaneous i.When goods are shipped to high-tariff countries,
 Factors minimal transfer prices are quoted to reduce the effect
 Socio-cultural factors of duty.
ii.To reduce income tax, goods are overpriced when
LABELLING: transferred to units in high-tax countries.
Labelling may be regarded as part of packaging because iii.When divided repatriation is curtailed by government
packaging decision – marking also involves the policy, income may be taken out in the form of high
consideration of the labeling requirements. Many prices for products or components shipped to units in
countries have laid down labeling requirement in respect that country.
of a number of commodities.
FUNCTIONS OF LABELLING:
STEPS IN PRICING
 Identifies the product  Defining pricing objectives
 Grading  Analyzing market characteristics
 Description  Calculating costs
 Product promotion PROMOTION:
 Protect the consumer promotional mix refers to the specific combination of the
 Makes product attractive tools, channels, and processes you use to promote your
offerings. It’s what you say, how you say it, who you say
FACTORS AFFECTING PRICING
it to, what channels you use to reach them, and how
 International marketing objectives
often you communicate.
 Costs
 Competition
 Product
 Differentiation

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IMPORTANCE OF PROMOTIONAL MIX?
 Price, and Place—and it’s arguably the most CH:3 TRADE
important
 The most profitable pricing strategy, and the best
possible location
POLICY AND
 Mix elements can make the difference between
success and failure. EXPORT
THE ESSENTIAL
ELEMENTS
PROMOTIONAL MIX
PROMOTION
 Advertising WHAT ARE TARIFFS BARRIERS?
 Sales promotion A tariff is a tax on the goods which one nation imports
 Personal selling from another. Many nations use tariffs to protect their
 Public relations and publicity own industries from foreign competition. Tariffs provide
 Direct marketing such protection in by raising the price of imported
 The advent of digital marketing goods, and encourage people to buy the goods
produced in their own country.
DISTRIBUTION
Where international marketing involves exporting, two TYPES OF TARIFFS:
categories of marketing channels are involved, viz.,  A specific tariff
channels between within the foreign market. The  A revenue tariff
international distribution system consists of two  A protective tariff
subsystems, namely, the domestic system and the  A prohibitive tariff
foreign system. The nature of the channel system is
affected by, among other things, by the method of OBJECTIVES OF TRADE BARRIERS:
exporting  To protect home industries from foreign competition
EXPORTING CAN BE DONE VIA TWO CHANNELS:  To promote new industries and r & d activities
A. INDIRECT EXPORT  To conserve foreign exchange reserves
1. MARKETING MIDDLEMEN  To maintain favorable balance of trade & payments
- Export Merchants position
- Agents/Brokers  To protect national economy from dumping
2. COOPERATIVE ORGANIZATIONS  To curb conspicuous consumption
 To mobilize additional revenue through heavy duties
B. DIRECT EXPORT
on imports
1. DOMESTIC – BASED
2. OVERSEAS SALES BRANCHES  To make the country strong and self-sufficient
3. TRAVELLING SALESMAN  To counteract trade barriers imposed by other
4. FOREIGN BASED DISTRIBUTORS OR AGENTS. countries
 To encourage the use of domestic production
TYPES OF FOREIGN INTERMEDIARIES
 Importers WHAT ARE NON-TARIFF BARRIERS?
 Distributors Non-tariff barriers (NTBs), some of which are described
as new protectionism measures have grown
 Retailers
considerably, particularly since around the beginning of
 Multiple
the 1980s. The export growth of many developing
 Channels
countries has been seriously affected by the NTBs,
 Government departments
THEY ARE OF TWO TYPES:
 State buying organizations
 The first category
 Joint-ventures and licensees/franchisees
 The second category
WHAT IS THE FULL FORM OF IIFT AND EPC? IMPORTANT NTB’s ARE:
IIFT - The Indian Institute of Foreign Trade (IIFT) a. Quotas
EPC - Export Promotion Council (EPC)  Tariff Quota
 Unilateral Quota
 Bilateral Quota
 Mixing Quota
b. Licensing
c. Administered Protection

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IMPACT OF NTBS WHAT IS SPECIAL
 Ntbs are less transparent ECONOMIC ZONE?
 Ntbs have been becoming more and more extensive The term special economic zone
and intensive not confined to the labour intensive (SEZ) is commonly used as a
products generic term to refer any modern
 Affect many exporting countries economic zone. In these zones
 Most affected of the developing countries because of business and trades laws differ
such barriers. from the rest of the country. Broadly, SEZs are located
 Ntbs also cause diversion of production and exports within a country’s national borders.
 Exporters have attempted to diversify
TYPES OF SPECIAL ECONOMIC ZONES:
EXPORT PROMOTION: The term special economic zone can include free trade
Objectives: zone (FTZ), export processing zones (EPZ), free
 To provide organizational and infrastructural zones/free economic zones (FZ/FEZ), industrial
facilities parks/industrial estates (IE), free ports, bonded logistics
 To provide production, marketing and financial parks (BLP), urban enterprise zones
support Objectives of SEZs can be explained as:
 To compensate the exporters for the high domestic
 Generation of additional economic activity
cost of production
 Promotion of exports of goods and services
 To provide necessary assistance to the new and
 Promotion of investment from domestic and foreign
small exporters
sources
 To increase the relative profitability of the export
 Creation of employment opportunities
business.
 Development of infrastructure facilities
EXPORT PROMOTION MEASURES
ADVANTAGES OF SEZS:
A. Organizational Set-Up
 Allowed to carry forward losses.
B. Incentives
C. Duty Exemption/Drawback  No license required for import made
D. Other Incentives Income Tax Concession  Duty free import
E. Marketing Assistance  Goods imported/procured locally are duty free
F. Production Assistance/Facilities  Exemption from customs duty on import of capital
G. Export Houses and Trading Houses goods
 Exemption from Central Excise duty on the
EXPORT PROMOTION procurement of capital goods
Objectives:  “Write-off” of unrealized export bills is permitted up
 To promote and develop the exports of the country. to an annual limit of 5%
 Each council is responsible for the promotion  No routine examination by Customs officials
 Export promotion councils (epcs) and specified  Setting up Off-shore Banking Units
agencies
 The main role of the epcs is to project India's image
DISADVANTAGES OF SEZS
abroad  Revenue losses
 The epcs shall encourage and monitor the  Number of units applying for setting up EOU's is not
observance of international standards commensurate to the number of applications
 Epcs shall keep abreast of the trends and WHAT IS “TRADE BLOCK"?
opportunities in international markets for goods and
A trading bloc is a group of countries which are
services
geographically close to each other and have similar
Major functions of the EPC’s are:
trade policies, which are can with their mutual co-
 To provide commercially useful information operation ensure a free flow of goods among them.
 To offer professional advice Certain countries from economic unions for their mutual
 Abroad to explore overseas market opportunities benefits and are known as trading blocs.
 To organize participation in trade fairs
The most significant trading blocs currently are:
 To promote interaction between the exporting
community and the Government European Union (EU)
 To build a statistical base and provide data on the  European Free Trade Area (EFTA)
exports and imports of the country.  North American Free Trade Agreement (NAFTA)
 Mercosur
 Association of Southeast Asian Nations (ASEAN)

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 Common Market of Eastern and Southern  Income tax registration
Africa (COMESA)  Registration with Reserve
 South Asian Free Trade Area (SAFTA) Bank of India
 Registration with Export
Objectives of trading blocs: Promotion – Council
 To remove or reduce the trade barriers  Registration with the Director
 To maintain better economic, political, cultural and General of - Foreign Trade
social relations  Registration with the sales-tax department
 To impose common external Tariff and non-tariff  Membership of Chamber of Commerce
barriers on Non – member countries.  Registration with other organization
 To promote the free transfer of labour capital and
other factors of productive B. PRE-SHIPMENT PROCEDURE
 Economies of member countries.  Getting an inquiry
 To create a common currency and central bank for  Replying to enquiry
the countries of the group  Receipt of order/letter of credit
 Security and acknowledgement of order
 Export License
CH:4 EXPORT 

Registration of export contract
Obtaining Quotas

PROCEDURE & 
Obtaining pre-shipment credit
Procurement and production of goods

DOCUMENTATION 
Pre-shipment inspection
Insurance
 Appointment of Clearing and Forwarding Agent
PRELIMINARIES OF EXPORT-IMPORT
TRANSACTION C. SHIPMENT PROCEDURE
The exporting activity involves several commercial and  Reservation of spaces
regulatory procedures. These procedures also involve  Transport of goods from factory to the port
considerable documentation requirements. Besides  Customs clearance
the documentation pertaining to the commercial aspects  Issue of Carting order
of the export business, there are documentation  Custom Clearance
requirements of a regularly nature like excise clearance,  Let Ship order
foreign exchange regulations, etc.  Loading the goods on the ship
 Issue of Mate’s receipt
(A) Preliminaries
 Endorsement
 IEC Number
 Issue of Bill of Lading
 Membership-cum-Registration
 Registration with EPC D. POST-SHIPMENT PROCEDURE
 Registration with Sales Tax Authorities  Dispatch of documents by agent to the Exporter
(B) Inquiry And Offer  Sending shipment advise to the importer
(C) Confirmation Of Order  Negotiation and collection
(D) Export License  Refund of excise duty
(E) Finance
(F) Production/Procurement Of Goods STANDARDISED AND ALIGNED PRE-
(G) Shipping Space SHIPMENT DOCUMENTS
(H) Packing And Marking  Commercial Documents
(I) Quality Control And Pre-Shipment Inspection  Principal Export Documents
(J) Excise Clearance  Auxiliary Documents
(K) Customers Formalities  Regulatory Documents
(L) Exchange Control Formalities
(M) Insurance DOCUMENTS RELATED TO GOODS:
(N) Shipping The Goods  Invoice
(O) Negotiation Of Documents  Packing Note and List
(P) Export Incentives  Certificate of Origin

EXPORT PROCEDURE IN DETAIL CERTIFICATES RELATED TO SHIPMENT

A. REGISTRATION PROCEDURE  Mate Receipt
 Opening a Bank a/c  Shipping Bill

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 Cart Ticket WHAT ARE THE
 Certificate of Management DOCUMENTS USED IN
 Bill of Lading
EXPORT BUSINESS.
 Airway Bill
(EXPLAIN ANY TWO)
DOCUMENTS RELATED TO PAYMENT: A. Commercial Invoice
a. Letter of credit B. Bill of Lading
b. Bill of exchange C. Bill of Exchange
Important types of bills of exchange Three parties involved in a bill of exchange:
 Sight Bill of Exchange  The Drawer
 Usance Bill of Exchange  The Drawee
 Clean Bill of Exchange  The Payee
 Documentary Bill of Exchange D. Letter of Credit
c. Trust receipt Letters of credit may be of the following types:
d. Letter of hypothecation  Revocable and Irrevocable
e. Bank certificate of payment  Confirmed and Unconfirmed
 With and Without Recourse
DOCUMENTS RELATING TO INSPECTION:
Certificate of Inspection: WHAT IS CONSULAR INVOICE?
It is a certificate issued by the Export Inspection Commercial invoice visaed (sighted, signed, and
Agency, certifying that the consignment has been stamped) by the consul of the importing country
inspected as required under the Export (Quality Control resident in the exporting country. It serves to exercise
and Inspection) Act, 1963, and satisfies the conditions control over imports, and help prevent over- and under-
relating to quality control and inspection as applicable invoicing.
to it, and is certified export worthy Significance of Consular Invoice:
 Importance to the Exporter
DOCUMENTS RELATED TO EXCISABLE
 Importance to the Importer
GOODS:  Importance to the Customs
 G.P. Forms
 Form C WHAT IS PROFORMA INVOICE?
 Forms AR-4/AR-4A An abridged or estimated invoice sent by a seller to a
buyer in advance of a shipment or delivery of goods. It
WHAT ARE INCO TERMS? notes the kind and quantity of goods, their value, and
The Inco terms (abbreviation of International commercial other important information such as weight and
terms) rules developed by the International Chamber of transportation charges. Pro forma invoices are
Commerce was created as an industry standard to commonly used as preliminary invoices with a
facilitate international trade and for the interpretation of quotation, or for customs purposes in importation. They
the trade terms. Currently in its 8th version, Inco terms differ from a normal invoice in not being a demand or
were first introduced in 1936 request for payment For customers it serves two main
Inco terms are divided into two classes: purposes: First, customers and another is product cost
a. Rules for any mode of transport
b. Rules for sea and inland waterway transport
When Proforma Invoice is Prepared?
 When the prospective buyer is interested
There are 11 Inco term rules in circulation currently,
 When the seller is interested in receiving the
they are:
payment
 EXW – Ex Works
 When the goods are sent to the agent under
 FCA – Free Carrier
consignment
 FAS – Free Alongside Ship
 In case of goods sold on an approval or return basis
 FOB – Free On Board
 In case a prospective buyer
 CFR – Cost and Freight
 When a new trader or a trader selling new products
 CIF – Cost, Insurance and Freight wants to inform the prospective buyers about price
 CPT – Carriage Paid To of goods.
 CIP – Carriage and Insurance Paid to
 DAT – Delivered at Terminal [Replaced DEQ- WHAT IS SHIPPING BILL?
Delivered Ex Quay Shipping Bill/ Bill of Export is the main document
 DAP – Delivered at Place required by the Customs Authority for allowing
 DDP – Delivered Duty Paid shipment. Usually the Shipping Bill is of four types
and the major distinction lies with regard to the goods
being subject to certain conditions which are:
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 Export duty/ cesz EXPLAIN TYPES OF FDI
 Free of duty/ cess;  Investment in plant,
 Entitlement of duty drawback; machinery, land and offices
 Entitlement of credit of duty under DEPB by creating 100% owned
 Scheme; Re-export of imported goods subsidiary in India
Types of Shipping Bills:  Investment in joint ventures
 Free Shipping Bill  Take-over of existing Indian
 Dutiable Shipping companies by foreign companies
 Drawback Shipping Bill  When foreign companies want to expand their
 Shipping bill for Shipment Ex-Bond existing Indian business they bring additional capital
 Coastal Shipping Bill to India in the form of FDI
 Intangible FDI / Intangible Investments
WHAT IS GR FORM IN EXPORT
Advantages Of FDI:
DOCUMENTS?  Growth possibilities
GR (Guaranteed Remittance) FORM  Development of economy at large will be slow
 Local businesses are not able to tap
(EXCHANGE CONTROL DOCUMENT)
 Provide enough capital & will cause economic
This is a declaration by the exporter in the format
growth
prescribed by RBI to be submitted along with the
 Existing business and industries will start growing
shipping bill to customs. The declaration must contain
rapidly.
the information about sender, consignee, description of
 Unbelievable growth in automobile
goods, and full export value of goods in foreign
currency, etc. The exporter submits a duplicate of GR  Development of various multinational company
form with its bank along with shipping documents. The  Mnc's bring latest technology, high class packaging,
bank endorses the copy after realization of sales latest product features in various businesses
proceeds and sends it to RBI. The original copy  Product and services standards improved causing
submitted at customs is also directed to RBI by the benefits to Indian customers
customs. Economic Benefits:
 Addition to Indian GDP
 Generation of employment
CH:5 FORIEGN DIRECT  Increase in tax revenue
 Development of certain local businesses
INVESTMENT  Inflow of foreign currency
Disadvantages of FDI:
MEANING OF FOREIGN DIRECT  Tough competition
INVESTMENT:  Spend large amount behind promotion
Foreign direct investment is an investment in a business  Unbelievable schemes
by an investor from another country for which the  Purpose of killing competition
foreign investor has control over the company  Accept the proposal of selling entire business
purchased. The Organization of Economic Cooperation
and Development defines control as owning 10 % or
FACTORS AFFECTING FOREIGN
more of the business INVESTMENT:
 Potential of new markets
Investment made by Enron in power plant in India is an  Companies often move along with customers
example of FDI. The investment made by a company in a  Logistic problem of sending finished goods to
foreign country over a given period is called ‘Out Flow of customers
Foreign Direct Investment’.  Difference in cost of production
FORMS OF FDI:  Continuous availability of manpower
 Purchase  Availability of natural resources
 New Investment  Political stability and ideology of ruling party
 Participation  Business rules for MNC's
 Transfer  Currency Exchange rate
 Equity  Attitude toward MNC's
 Local competition in host nation

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FDI PROHIBITED SECTORS:
 Lottery Business including Government/private
lottery, online lotteries
 Gambling and Betting including casinos etc.
 Chit funds
 Nidhi company
 Trading in Transferable Development Rights (tdrs)
 Real Estate Business or Construction of Farm
Houses
 Manufacturing of cigars, cheroots, cigarillos and
cigarettes
 Activities/sectors not open to private sector
investment

WHAT ARE FDI AND FII? (02)

FDI or Foreign Direct Investment is an investment that a
parent company makes in a foreign country.
On the contrary, FII or Foreign Institutional Investor is an
investment made by an investor in the markets of a
foreign nation.

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